In a note to clients, Oppenheimer tech analyst Yair Reiner quoted supply-chain contacts as saying that Apple appeared to be preparing to begin production of as many as 1 million units a month. Assuming there were no production problems, at that rate Apple would have the inventory it needs to launch the device by March or April.

Excerpts from Reiner's note were posted on Fortune's BrainStorm Tech blog and the tech site AppleInsider.

Other tidbits from Reiner's prognostications include the information the Apple's tablet will have a 10.1-inch diagonal screen. The display is said to use the same type of LCD technology as the iPhone, rather than the higher quality, but more expensive, OLED display.

In addition, Apple is believed to be planning to offer e-book publishers friendlier terms for offering their wares through iTunes than they currently get from Amazon. Apple would offer a 30/70 revenue split, with 70% going to publishers, without exclusivity, according to Reiner. Amazon offers the same split, but with exclusivity rights.

As a matter of company policy, Apple doesn't discuss future product plans. However, most industry watchers believe the company will release a so-called "iPad" tablet.

Amazon's Kindle is the online retailer's hottest selling product, and Barnes & Noble, which announced its Nook e-reader in October, won't be able to fill all its current orders until mid January. Forrester Research estimates sales of e-readers next year will reach 10 million units in the United States.

Update: this is rumoured to be the new iPad